VW overcomes scandal with sales boost

Bloomberg

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Volkswagen posted its biggest monthly sales gain this year as a surge in China offset a drop in Brazil and eroding market share in Europe in a sign that the car maker is overcoming the emissions-cheating scandal.

Volkswagen’s worldwide sales jumped 7.1% last month to 947 600 vehicles, buoyed by strong demand for its Skoda brand, the Wolfsburg, Germany-based company said on Friday.

The namesake VW marque edged into positive territory for the first time this year, bolstered by a surge in deliveries in China last month.

Fred Kappler, VW’s head of sales, said:

“The increased deliveries make us optimistic we will be able to master the upcoming challenges. Reinforcing our customers’ trust in our products remains our top priority.”

The manufacturer has been battling after admitting to cheating on emissions tests in September 2015 and tarnishing its image.

In Europe, where about 8.5 million tainted cars were sold, Volkswagen has been losing ground to competitors, as rivals including Daimler and Fiat Chrysler Automobiles benefit from the loss of confidence.

Last month, Volkswagen was battered by negative publicity related to investor lawsuits and the resignation of the head of development at the Audi luxury brand amid legal investigations.

Volkswagen accounted for 22.9% of European sales last month, down from 23.3% a year earlier, the European Automobile Manufacturers’ Association said on Friday.

Its nine-month market share of 23.9% is the lowest since 2011.

Volkswagen deliveries in the region rose 5.6% last month, compared with a gain of 7.3% to 1.5 million vehicles for the whole industry, the association said.

Still, those woes were offset by demand in China. The group’s sales in the market, which accounts for more than one-third of global sales, jumped 20% to 382 300 vehicles.

That more than offset a 59% plunge in Brazilian deliveries to 13 200.

Volkswagen shares, which have tumbled 26% since the cheating became public, rose 2.3% to €120.35 (R1 872.16) in Frankfurt trading on Friday, valuing the company at €63.8 billion. – Bloomberg